WHAT'S NEXT: Minnesota Timberwolves

WHAT'S NEXT: Minnesota Timberwolves

The NBA is an ecosystem. There are good teams, there are bad teams and there are teams just sort of hanging around the middle. It’s a world of predators, prey and those content to live life uneaten.

Sometimes the prey grows large enough that they become the predators. Sometimes the predators weaken enough that the prey picks them apart until there’s only scraps left as a reminder of their former dominance.

For most of their existence, despite their predatory namesakes, the Minnesota Timberwolves have been prey vs predators.

It took until their eighth year of existence to make the playoffs. Led by the snarling ferocity of Kevin Garnett, the Timberwolves became a playoff mainstay. Unfortunately, all but one of those years were one-and-done appearances. In 2004, that changed and Minnesota made it all the way to the Western Conference Finals. Those Wolves pushed the Los Angeles Lakers hard in a six-game series.

Then, just like that, the predator became the prey again.

Minnesota slipped a bit in 2004-05, then they fell off the cliff. That fall saw a baker’s dozen worth of years without even really sniffing the playoffs. A few years into the drought, Garnett was traded to the Boston Celtics and the Wolves were left at the bottom of the NBA.

Sure, there was the blip in 2018, when the team snapped the playoff drought. Then everything got weird with Jimmy Butler and Minnesota was back to the dregs again.

That 2004 team is revered in Timberwolves history because of what it meant to Minnesota basketball fans. They finally broke through with Garnett and the best team in history. The Wolves were right there.

And then they weren’t. And they’ve never been close again.

2004 is also an interesting landmark in Timberwolves history for another reason. That season was the last time Minnesota paid a significant luxury tax bill.

According to NBA cap and roster expert Mark Deeks, the Wolves have paid the luxury tax four times. Twice, in 2007 and 2020, it was such a minor amount that it was probably a mistake for the team to not dodge the tax line.

In 2003, as the team was building towards the peak of the Garnett era, the Wolves paid $6 million tax bill. The next year, that ballooned to $17.6 million.

And that was the last time Minnesota went more than $1 million into the tax. In total, the Wolves have paid just over $25 million in luxury taxes in their 35-year history. That ranks around the lower-third of the NBA.

Barring some major moves, that’s about to change in a major way.

The Timberwolves are on pace to equal the 2004 team’s franchise record of 58 wins. They’ve been one of the best teams in the Western Conference all season long. They currently posses the NBA’s best defense and the offense is just good enough. Minnesota has a good mix of ascending superstars, establish All-Stars and win-now veterans.

The Wolves have what it takes to be a consistent contender for the first time in franchise history…assuming they’re willing to pay for it.

Everyone knows the Golden State Warriors, LA Clippers, Phoenix Suns and Boston Celtics are wildly expensive. Most know the Milwaukee Bucks and Denver Nuggets have invested heavily into title contenders. It’s no surprise to see NBA luxury teams like the Los Angeles Lakers and Miami Heat climbing up the ranks of potential tax teams.

But the Timberwolves? The team that has been somewhere between terrible and irrelevant for most of their 35 years?

Yup. This is where the Wolves live now. It’s a nice place, but you gotta pay to live here.

At the start of the 2024-25 season, the Minnesota Timberwolves have the following fully guaranteed salaries on their books:

$183.7 million for nine players. That’s five players short of the minimum that NBA teams must carry. Let’s fill out the Wolves roster with five minimum salary players for now. That brings the total to a projected $189.5 million.

The NBA’s luxury tax line for 2024-25 is currently projected to be $171.3 million. Even without filling out the roster, Minnesota has blown way past that line.

The first apron for 2024-25 is currently projected to be $178.6 million. The second apron projects to be $189.5 million.

Bam. There it is.

If we remove key vets like Kyle Anderson and Monte Morris (both are unrestricted free agents this summer) and replace them with minimum salary players, the Wolves are already right at the second apron.

What if Minnesota makes a deep playoff run and brings Anderson and Morris back? (It’s worth noting that the Wolves don’t have younger in-house options ready to take the roles Anderson and Morris play.) Let’s plug them in $10 million each, which is a tick above where each is now salary-wise. But that’s less than the Non-Taxpayer MLE and it’s a fair value for both players. That, plus the corresponding (and optimistic!) three minimum salary players, brings the Timberwolves salary to a projected $207.2 million.

Let that sink in for a moment…$207-plus million.

That’s more expensive than this season’s Warriors or Clippers.

The Minnesota Timberwolves as the most expensive roster team in the NBA? Seems unfathomable, right?

Again: this is where the Wolves live now.

Now…let’s extrapolate things further, shall we?

Anthony Edwards is having the best season of his career. He was a second-time All-Star this season and his team is atop the Western Conference. There’s a great chance that’s going to come with All-NBA honors, and deservedly so.

If Edwards makes All-NBA, his 25% of the cap max extension will tick up to a 30% of the cap max extension. That changes his first-year salary from a projected $35,250,000 to $42,300,000. If we leave in the estimates of $10 million for each of Anderson and Morris and bump Edwards up, the Wolves salary lands at $214.2 million.

Whew boy… And it doesn’t end there! That’s just the team salary. We haven’t even gotten into the tax penalties yet.

Let’s really start spending Marc Lore’s and Alex Rodriguez’s money!

There are three basic scenarios here:

  • Scenario 1: Team as is, no max bump for Anthony Edwards, filling out with five minimum deals
  • Scenario 2: Team as is, no max bump for Anthony Edwards, $10 million each for Kyle Anderson and Monte Morris
  • Scenario 3: Team as is, max bump for Anthony Edwards, $10 million each for Kyle Anderson and Monte Morris

(Yes, there are countless other scenarios we could run, but we’re going to stick with these three for instructional purposes.)

Here’s where everything lays out in each scenario:

  • Scenario 1: Team Salary of $189.5 million, Tax Bill of $38.6 million, Total Cost of $228.1 million
  • Scenario 2: Team Salary of $207.2 million, Tax Bill of $111.5 million, Total Cost of $318.7 million
  • Scenario 3: Team salary of $214.2 million, Tax Bill of $149.4 million, Total Cost of $363.6 million

The saving grace for Minnesota in each scenario? They are a first-time tax team. So, no repeater penalties here…yet.

For reference, this season, the Golden State Warriors are facing a total bill of salaries plus tax penalties of $382.4 million. The LA Clippers are looking at $342.4 million in total. If we go further down, the Phoenix Suns, Boston Celtics, Milwaukee Bucks and Denver Nuggets are all around the $200 to $250 million mark in total. Next season’s Timberwolves project to fall somewhere in that grouping.

The one thing those teams have in common beyond massive financial commitments? They are title contenders, outside of the Warriors, who are still paying the piper from nearly a decade of title contention.

Which begs the question: Can you win a title in the NBA without paying the tax?

The NBA’s luxury tax system went into place with the 2001-02 season. That season and in 2004-05, there were no tax penalties levied due to inefficient Basketball Related Income (BRI). That means that as of the last full season, we’ve had 20 years where the luxury tax system (in all its different forms) has been in place.

In those 20 years, 15 NBA champions have paid the tax. The lone exceptions:

  • 2006 Miami Heat
  • 2014 San Antonio Spurs
  • 2015 Golden State Warriors
  • 2017 Golden State Warriors
  • 2020 Los Angeles Lakers

That’s it. Five teams in 20 seasons. But what about contending for a title and making it to the NBA Finals?

Over that same 20-season sample, 27 of the 40 NBA Finals teams have paid the tax. In fact, every NBA Finals matchup during the luxury tax years has featured at least one team that paid the tax that season.

That leaves us with 75% of all NBA champions who have paid the tax (15 out of 20) and 67.5% of all NBA Finals teams who have paid the tax (27 out of 40).

So, back to our question: Can you win the title in the NBA without paying the tax?

You can, but it’s very difficult to do. It’s difficult to even get to the NBA’s biggest stage without paying the tax.

And that brings us back to the Minnesota Timberwolves and the sustainability of this current team.

As we’ve laid out, the Wolves are going to be somewhere between expensive and extraordinarily expensive next season. But Minnesota is also a title contender, or they at least look the part.

Maybe this year’s Timberwolves will break through and join that exclusive club to win a title or make the NBA Finals without paying the tax. But if they do, they won’t have that status for long. The math just doesn’t support Minnesota not being a tax team next season, barring something unexpected.

And therein lies the rub.

The Wolves have a new ownership group. And it’s one that needed an extension and additional partners to push their purchase of the team over the finish line. That new ownership group is also pushing for a new arena for the team. And, as we all know, new arena’s need public support to get built.

This isn’t Steve Ballmer buying the LA Clippers. Ballmer bought the Clippers, immediately committed to spending exorbitant sums of money to field a contender and then ponying up considerable sums to build his own new arena. This is a smaller market team with new owners walking into an expensive roster and a potential new arena battle.

However, to their credit, the Timberwolves seem committed to winning in ways we haven’t seen from the franchise before. Even with a looming extension for Karl-Anthony Towns already in place, Minnesota traded for Rudy Gobert and extended deals for Naz Reid, Anthony Edwards, Jaden McDaniels and Mike Conley. That’s putting your money where you mouth is when it comes to winning.

The Minnesota Timberwolves are here now. They’re in rarified air as a franchise. Never has Minnesota been this well setup for long-term success as they are now. The Timberwolves failed to properly capitalize on the Kevin Garnett era, resulting in just that one beloved run in 2004. This current team will need to win, and win at a high level, to stay together. Otherwise, all the questions about being too expensive will start. That’s usually followed by roster changes, which often see a team take a step backwards. And that window before the questions start is a lot smaller than anyone ever thinks it is.

Wolves are an apex predator. They’ll have to pay to stay here, but it’s long past time for the NBA’s Wolves to stop being prey and to take their place as predators.